EX-12 2 ex12.htm EXHIBIT 12 Exhibit 12
Exhibit 12
CONSOLIDATED EARNINGS RATIOS

The following table sets forth, for the years and periods indicated, Protective Life Insurance Company’s (the “Company”) ratios of:

·  
Consolidated earnings to fixed charges.
·  
Consolidated earnings to fixed charges before interest credited on investment products.


 
Nine Months Ended
September 30
  
Year Ended December 31
 
2006
2005
  
2005
2004
2003
2002
2001
Ratio of Consolidated Earnings to Fixed Charges(1)
  1.5
  1.5
  
  1.5
  1.6
  1.5
  1.3
  1.2
Ratio of Consolidated Earnings to Fixed Charges
Before Interest Credited on Investment Products(2)
20.3
30.7
  
38.5
46.4
83.4
49.1
47.2
(1)  The Company calculates the ratio of “Consolidated Earnings to Fixed Charges” by dividing the sum of income from continuing operations before income tax (BT), interest expense (which includes an estimate of the interest component of operating lease expense) (I) and interest
credited  on investment products (IP) by the sum of interest expense (I) and interest credited on investment products (IP). The formula for this ratio is: (BT+I+IP)/(I+IP). The Company continues to sell investment products that credit interest to the contractholder. Investment products include products such as guaranteed investment contracts, annuities, and variable universal life insurance policies. The inclusion of interest credited on investment products results in a negative impact on the ratio of earnings to fixed charges because the effect of increases in interest credited to contractholders more than offsets the effect of the increases in earnings.
(2) The Company calculates the ratio of “Consolidated Earnings to Fixed Charges Before Interest Credited on Investment Products” by dividing the sum of income from continuing operations before income tax (BT) and interest expense (I) by interest expense (I). The formula for this calculation, therefore, would be: (BT+I)/I.

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Exhibit 12
(continued)

COMPUTATION OF CONSOLIDATED EARNINGS RATIOS
(Dollars in thousands)

 
Nine Months Ended
September 30
  
Year Ended December 31 
 
2006
2005
  
2005
2004
2003
2002
2001
Computation of Ratio of Consolidated
Earnings to Fixed Charges
                              
                               
Income from Continuing Operations
before Income Tax
$291,325
  
$254,628
    
$ 361,215
  
$ 371,163
  
$ 349,972
  
$ 241,623
  
$ 213,958
  
                               
Add Interest Expense
15,090
  
8,578
    
9,632
  
8,167
  
4,249
  
5,019
  
4,633
  
                               
Add Interest Credited on Investment
Products
631,131
  
532,337
    
726,301
  
649,216
  
647,695
  
900,930
  
944,098
  
                               
Earnings before Interest, Interest
Credited on Investment Products
and Taxes
$937,546
  
$795,543
    
$1,097,148
  
$1,028,546
  
$1,001,916
  
$1,147,572
  
$1,162,689
  
                               
Earnings before Interest, Interest
Credited on Investment Products
and Taxes Divided by Interest
expense and Interest Credited on
Investment Products
1.5
  
1.5
    
1.5
  
1.6
  
1.5
  
1.3
  
1.2
  
                               
Computation of Ratio of Consolidated
Earnings to Fixed Charges Before
Interest Credited on Investment
Products
                              
                               
Income from Continuing Operations
before Income Tax
$291,325
  
$254,628
    
$361,215
  
$371,163
  
$349,972
  
$241,623
  
$213,958
  
 
 
                            
Add Interest Expense
15,090
  
8,578
    
9,632
  
8,167
  
4,249
  
5,019
  
4,633
  
Earnings before Interest and Taxes
$306,415
  
$263,206
    
$370,847
  
$379,330
  
$354,221
  
$246,642
  
$218,591
  
                               
Earnings before Interest and Taxes
Divided by Interest Expense
20.3
  
30.7
    
38.5
  
46.4
  
83.4
  
49.1
  
47.2
  

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